diff --git a/impls/src/error.rs b/impls/src/error.rs
index 85ee501d3..aadb2bd73 100644
--- a/impls/src/error.rs
+++ b/impls/src/error.rs
@@ -57,6 +57,10 @@ pub enum ErrorKind {
 	#[fail(display = "Wallet seed doesn't exist error")]
 	WalletSeedDoesntExist,
 
+	/// Wallet seed doesn't exist
+	#[fail(display = "Wallet doesn't exist at {}. {}", _0, _1)]
+	WalletDoesntExist(String, String),
+
 	/// Enc/Decryption Error
 	#[fail(display = "Enc/Decryption error (check password?)")]
 	Encryption,
diff --git a/impls/src/seed.rs b/impls/src/seed.rs
index 4770da334..485f5e604 100644
--- a/impls/src/seed.rs
+++ b/impls/src/seed.rs
@@ -138,6 +138,13 @@ impl WalletSeed {
 		if WalletSeed::seed_file_exists(wallet_config).is_err() {
 			WalletSeed::backup_seed(wallet_config)?;
 		}
+		if !Path::new(&wallet_config.data_file_dir).exists() {
+			return Err(ErrorKind::WalletDoesntExist(
+				wallet_config.data_file_dir.clone(),
+				"To create a new wallet from a recovery phrase, use 'grin-wallet init -r'"
+					.to_owned(),
+			))?;
+		}
 		let seed = WalletSeed::from_mnemonic(word_list)?;
 		let enc_seed = EncryptedWalletSeed::from_seed(&seed, password)?;
 		let enc_seed_json = serde_json::to_string_pretty(&enc_seed).context(ErrorKind::Format)?;