diff --git a/drivers/hv/hv_kvp.c b/drivers/hv/hv_kvp.c
index 9b9b370fe22a8b4295fd217e745bd9bde15c1f9e..cb1a9160aab15064d95f710755ba4acdcad2eb69 100644
--- a/drivers/hv/hv_kvp.c
+++ b/drivers/hv/hv_kvp.c
@@ -78,9 +78,11 @@ static void kvp_send_key(struct work_struct *dummy);
 
 static void kvp_respond_to_host(struct hv_kvp_msg *msg, int error);
 static void kvp_timeout_func(struct work_struct *dummy);
+static void kvp_host_handshake_func(struct work_struct *dummy);
 static void kvp_register(int);
 
 static DECLARE_DELAYED_WORK(kvp_timeout_work, kvp_timeout_func);
+static DECLARE_DELAYED_WORK(kvp_host_handshake_work, kvp_host_handshake_func);
 static DECLARE_WORK(kvp_sendkey_work, kvp_send_key);
 
 static const char kvp_devname[] = "vmbus/hv_kvp";
@@ -130,6 +132,11 @@ static void kvp_timeout_func(struct work_struct *dummy)
 	hv_poll_channel(kvp_transaction.recv_channel, kvp_poll_wrapper);
 }
 
+static void kvp_host_handshake_func(struct work_struct *dummy)
+{
+	hv_poll_channel(kvp_transaction.recv_channel, hv_kvp_onchannelcallback);
+}
+
 static int kvp_handle_handshake(struct hv_kvp_msg *msg)
 {
 	switch (msg->kvp_hdr.operation) {
@@ -154,6 +161,12 @@ static int kvp_handle_handshake(struct hv_kvp_msg *msg)
 	pr_debug("KVP: userspace daemon ver. %d registered\n",
 		 KVP_OP_REGISTER);
 	kvp_register(dm_reg_value);
+
+	/*
+	 * If we're still negotiating with the host cancel the timeout
+	 * work to not poll the channel twice.
+	 */
+	cancel_delayed_work_sync(&kvp_host_handshake_work);
 	hv_poll_channel(kvp_transaction.recv_channel, kvp_poll_wrapper);
 
 	return 0;
@@ -594,7 +607,22 @@ void hv_kvp_onchannelcallback(void *context)
 	struct icmsg_negotiate *negop = NULL;
 	int util_fw_version;
 	int kvp_srv_version;
+	static enum {NEGO_NOT_STARTED,
+		     NEGO_IN_PROGRESS,
+		     NEGO_FINISHED} host_negotiatied = NEGO_NOT_STARTED;
 
+	if (host_negotiatied == NEGO_NOT_STARTED &&
+	    kvp_transaction.state < HVUTIL_READY) {
+		/*
+		 * If userspace daemon is not connected and host is asking
+		 * us to negotiate we need to delay to not lose messages.
+		 * This is important for Failover IP setting.
+		 */
+		host_negotiatied = NEGO_IN_PROGRESS;
+		schedule_delayed_work(&kvp_host_handshake_work,
+				      HV_UTIL_NEGO_TIMEOUT * HZ);
+		return;
+	}
 	if (kvp_transaction.state > HVUTIL_READY)
 		return;
 
@@ -672,6 +700,8 @@ void hv_kvp_onchannelcallback(void *context)
 		vmbus_sendpacket(channel, recv_buffer,
 				       recvlen, requestid,
 				       VM_PKT_DATA_INBAND, 0);
+
+		host_negotiatied = NEGO_FINISHED;
 	}
 
 }
@@ -708,6 +738,7 @@ hv_kvp_init(struct hv_util_service *srv)
 void hv_kvp_deinit(void)
 {
 	kvp_transaction.state = HVUTIL_DEVICE_DYING;
+	cancel_delayed_work_sync(&kvp_host_handshake_work);
 	cancel_delayed_work_sync(&kvp_timeout_work);
 	cancel_work_sync(&kvp_sendkey_work);
 	hvutil_transport_destroy(hvt);
diff --git a/drivers/hv/hyperv_vmbus.h b/drivers/hv/hyperv_vmbus.h
index e5c586fab0e57dd616c8b8da0142896f8bd398e3..e5203e4d67825636150b860cfd2b8ddb4f30d274 100644
--- a/drivers/hv/hyperv_vmbus.h
+++ b/drivers/hv/hyperv_vmbus.h
@@ -35,6 +35,11 @@
  */
 #define HV_UTIL_TIMEOUT 30
 
+/*
+ * Timeout for guest-host handshake for services.
+ */
+#define HV_UTIL_NEGO_TIMEOUT 60
+
 /*
  * The below CPUID leaves are present if VersionAndFeatures.HypervisorPresent
  * is set by CPUID(HVCPUID_VERSION_FEATURES).