diff --git a/stix2/base.py b/stix2/base.py
index 2c48ef6..c0e52e6 100644
--- a/stix2/base.py
+++ b/stix2/base.py
@@ -1,6 +1,7 @@
 """Base classes for type definitions in the STIX2 library."""
 
 import copy
+import itertools
 import re
 import uuid
 
@@ -12,7 +13,7 @@ from stix2.canonicalization.Canonicalize import canonicalize
 from .exceptions import (
     AtLeastOnePropertyError, DependentPropertiesError, ExtraPropertiesError,
     ImmutableError, InvalidObjRefError, InvalidValueError,
-    MissingPropertiesError, MutuallyExclusivePropertiesError,
+    MissingPropertiesError, MutuallyExclusivePropertiesError, STIXError,
 )
 from .markings import _MarkingsMixin
 from .markings.utils import validate
@@ -54,7 +55,7 @@ class _STIXBase(Mapping):
 
         return all_properties
 
-    def _check_property(self, prop_name, prop, kwargs):
+    def _check_property(self, prop_name, prop, kwargs, allow_custom):
         if prop_name not in kwargs:
             if hasattr(prop, 'default'):
                 value = prop.default()
@@ -62,9 +63,12 @@ class _STIXBase(Mapping):
                     value = self.__now
                 kwargs[prop_name] = value
 
+        has_custom = False
         if prop_name in kwargs:
             try:
-                kwargs[prop_name] = prop.clean(kwargs[prop_name])
+                kwargs[prop_name], has_custom = prop.clean(
+                    kwargs[prop_name], allow_custom,
+                )
             except InvalidValueError:
                 # No point in wrapping InvalidValueError in another
                 # InvalidValueError... so let those propagate.
@@ -74,6 +78,8 @@ class _STIXBase(Mapping):
                     self.__class__, prop_name, reason=str(exc),
                 ) from exc
 
+        return has_custom
+
     # interproperty constraint methods
 
     def _check_mutually_exclusive_properties(self, list_of_properties, at_least_one=True):
@@ -113,7 +119,6 @@ class _STIXBase(Mapping):
 
     def __init__(self, allow_custom=False, **kwargs):
         cls = self.__class__
-        self._allow_custom = allow_custom
 
         # Use the same timestamp for any auto-generated datetimes
         self.__now = get_timestamp()
@@ -123,16 +128,18 @@ class _STIXBase(Mapping):
         if custom_props and not isinstance(custom_props, dict):
             raise ValueError("'custom_properties' must be a dictionary")
 
-        extra_kwargs = list(set(kwargs) - set(self._properties))
-        if extra_kwargs and not self._allow_custom:
+        extra_kwargs = kwargs.keys() - self._properties.keys()
+        if extra_kwargs and not allow_custom:
             raise ExtraPropertiesError(cls, extra_kwargs)
 
-        # because allow_custom is true, any extra kwargs are custom
-        if custom_props or extra_kwargs:
-            self._allow_custom = True
-            if isinstance(self, stix2.v21._STIXBase21):
-                all_custom_prop_names = extra_kwargs
-                all_custom_prop_names.extend(list(custom_props.keys()))
+        if custom_props:
+            # loophole for custom_properties...
+            allow_custom = True
+
+        all_custom_prop_names = extra_kwargs | custom_props.keys() - \
+            self._properties.keys()
+        if all_custom_prop_names:
+            if not isinstance(self, stix2.v20._STIXBase20):
                 for prop_name in all_custom_prop_names:
                     if not re.match(PREFIX_21_REGEX, prop_name):
                         raise InvalidValueError(
@@ -141,12 +148,11 @@ class _STIXBase(Mapping):
                         )
 
         # Remove any keyword arguments whose value is None or [] (i.e. empty list)
-        setting_kwargs = {}
-        props = kwargs.copy()
-        props.update(custom_props)
-        for prop_name, prop_value in props.items():
-            if prop_value is not None and prop_value != []:
-                setting_kwargs[prop_name] = prop_value
+        setting_kwargs = {
+            k: v
+            for k, v in itertools.chain(kwargs.items(), custom_props.items())
+            if v is not None and v != []
+        }
 
         # Detect any missing required properties
         required_properties = set(get_required_properties(self._properties))
@@ -154,8 +160,13 @@ class _STIXBase(Mapping):
         if missing_kwargs:
             raise MissingPropertiesError(cls, missing_kwargs)
 
+        has_custom = bool(all_custom_prop_names)
         for prop_name, prop_metadata in self._properties.items():
-            self._check_property(prop_name, prop_metadata, setting_kwargs)
+            temp_custom = self._check_property(
+                prop_name, prop_metadata, setting_kwargs, allow_custom,
+            )
+
+            has_custom = has_custom or temp_custom
 
         # Cache defaulted optional properties for serialization
         defaulted = []
@@ -174,6 +185,22 @@ class _STIXBase(Mapping):
 
         self._check_object_constraints()
 
+        if allow_custom:
+            self.__has_custom = has_custom
+
+        else:
+            # The simple case: our property cleaners are supposed to do their
+            # job and prevent customizations, so we just set to False.  But
+            # this sanity check is helpful for finding bugs in those clean()
+            # methods.
+            if has_custom:
+                raise STIXError(
+                    "Internal error: a clean() method did not properly enforce "
+                    "allow_custom=False!",
+                )
+
+            self.__has_custom = False
+
     def __getitem__(self, key):
         return self._inner[key]
 
@@ -220,13 +247,16 @@ class _STIXBase(Mapping):
         if isinstance(self, _Observable):
             # Assume: valid references in the original object are still valid in the new version
             new_inner['_valid_refs'] = {'*': '*'}
-        new_inner['allow_custom'] = self._allow_custom
-        return cls(**new_inner)
+        return cls(allow_custom=True, **new_inner)
 
     def properties_populated(self):
         return list(self._inner.keys())
 
-#  Versioning API
+    @property
+    def has_custom(self):
+        return self.__has_custom
+
+    #  Versioning API
 
     def new_version(self, **kwargs):
         return _new_version(self, **kwargs)
@@ -348,20 +378,21 @@ class _Observable(_STIXBase):
             if ref_type not in allowed_types:
                 raise InvalidObjRefError(self.__class__, prop_name, "object reference '%s' is of an invalid type '%s'" % (ref, ref_type))
 
-    def _check_property(self, prop_name, prop, kwargs):
-        super(_Observable, self)._check_property(prop_name, prop, kwargs)
-        if prop_name not in kwargs:
-            return
+    def _check_property(self, prop_name, prop, kwargs, allow_custom):
+        has_custom = super(_Observable, self)._check_property(prop_name, prop, kwargs, allow_custom)
 
-        from .properties import ObjectReferenceProperty
-        if prop_name.endswith('_ref'):
-            if isinstance(prop, ObjectReferenceProperty):
-                ref = kwargs[prop_name]
-                self._check_ref(ref, prop, prop_name)
-        elif prop_name.endswith('_refs'):
-            if isinstance(prop.contained, ObjectReferenceProperty):
-                for ref in kwargs[prop_name]:
+        if prop_name in kwargs:
+            from .properties import ObjectReferenceProperty
+            if prop_name.endswith('_ref'):
+                if isinstance(prop, ObjectReferenceProperty):
+                    ref = kwargs[prop_name]
                     self._check_ref(ref, prop, prop_name)
+            elif prop_name.endswith('_refs'):
+                if isinstance(prop.contained, ObjectReferenceProperty):
+                    for ref in kwargs[prop_name]:
+                        self._check_ref(ref, prop, prop_name)
+
+        return has_custom
 
     def _generate_id(self):
         """
diff --git a/stix2/properties.py b/stix2/properties.py
index dbbe667..85d4e08 100644
--- a/stix2/properties.py
+++ b/stix2/properties.py
@@ -134,11 +134,23 @@ class Property(object):
 
     Subclasses can also define the following functions:
 
-    - ``def clean(self, value) -> any:``
-        - Return a value that is valid for this property. If ``value`` is not
-          valid for this property, this will attempt to transform it first. If
-          ``value`` is not valid and no such transformation is possible, it
-          should raise an exception.
+    - ``def clean(self, value, allow_custom) -> (any, has_custom):``
+        - Return a value that is valid for this property, and enforce and
+          detect value customization.  If ``value`` is not valid for this
+          property, you may attempt to transform it first.  If ``value`` is not
+          valid and no such transformation is possible, it must raise an
+          exception.  The method is also responsible for enforcing and
+          detecting customizations.  If allow_custom is False, no customizations
+          must be allowed.  If any are encountered, an exception must be raised
+          (e.g. CustomContentError).  If none are encountered, False must be
+          returned for has_custom.  If allow_custom is True, then the clean()
+          method is responsible for detecting any customizations in the value
+          (just because the user has elected to allow customizations doesn't
+          mean there actually are any).  The method must return an appropriate
+          value for has_custom.  Customization may not be applicable/possible
+          for a property.  In that case, allow_custom can be ignored, and
+          has_custom must be returned as False.
+
     - ``def default(self):``
         - provide a default value for this property.
         - ``default()`` can return the special value ``NOW`` to use the current
@@ -159,10 +171,10 @@ class Property(object):
 
     """
 
-    def _default_clean(self, value):
+    def _default_clean(self, value, allow_custom=False):
         if value != self._fixed_value:
             raise ValueError("must equal '{}'.".format(self._fixed_value))
-        return value
+        return value, False
 
     def __init__(self, required=False, fixed=None, default=None):
         self.required = required
@@ -180,14 +192,8 @@ class Property(object):
         if default:
             self.default = default
 
-    def clean(self, value):
-        return value
-
-    def __call__(self, value=None):
-        """Used by ListProperty to handle lists that have been defined with
-        either a class or an instance.
-        """
-        return value
+    def clean(self, value, allow_custom=False):
+        return value, False
 
 
 class ListProperty(Property):
@@ -219,7 +225,7 @@ class ListProperty(Property):
 
         super(ListProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom):
         try:
             iter(value)
         except TypeError:
@@ -228,21 +234,22 @@ class ListProperty(Property):
         if isinstance(value, (_STIXBase, str)):
             value = [value]
 
+        result = []
+        has_custom = False
         if isinstance(self.contained, Property):
-            result = [
-                self.contained.clean(item)
-                for item in value
-            ]
+            for item in value:
+                valid, temp_custom = self.contained.clean(item, allow_custom)
+                result.append(valid)
+                has_custom = has_custom or temp_custom
 
         else:  # self.contained must be a _STIXBase subclass
-            result = []
             for item in value:
                 if isinstance(item, self.contained):
                     valid = item
 
                 elif isinstance(item, Mapping):
                     # attempt a mapping-like usage...
-                    valid = self.contained(**item)
+                    valid = self.contained(allow_custom=allow_custom, **item)
 
                 else:
                     raise ValueError(
@@ -252,12 +259,16 @@ class ListProperty(Property):
                     )
 
                 result.append(valid)
+                has_custom = has_custom or valid.has_custom
+
+        if not allow_custom and has_custom:
+            raise CustomContentError("custom content encountered")
 
         # STIX spec forbids empty lists
         if len(result) < 1:
             raise ValueError("must not be empty.")
 
-        return result
+        return result, has_custom
 
 
 class StringProperty(Property):
@@ -265,10 +276,10 @@ class StringProperty(Property):
     def __init__(self, **kwargs):
         super(StringProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         if not isinstance(value, str):
-            return str(value)
-        return value
+            value = str(value)
+        return value, False
 
 
 class TypeProperty(Property):
@@ -286,9 +297,9 @@ class IDProperty(Property):
         self.spec_version = spec_version
         super(IDProperty, self).__init__()
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         _validate_id(value, self.spec_version, self.required_prefix)
-        return value
+        return value, False
 
     def default(self):
         return self.required_prefix + str(uuid.uuid4())
@@ -301,7 +312,7 @@ class IntegerProperty(Property):
         self.max = max
         super(IntegerProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         try:
             value = int(value)
         except Exception:
@@ -315,7 +326,7 @@ class IntegerProperty(Property):
             msg = "maximum value is {}. received {}".format(self.max, value)
             raise ValueError(msg)
 
-        return value
+        return value, False
 
 
 class FloatProperty(Property):
@@ -325,7 +336,7 @@ class FloatProperty(Property):
         self.max = max
         super(FloatProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         try:
             value = float(value)
         except Exception:
@@ -339,29 +350,26 @@ class FloatProperty(Property):
             msg = "maximum value is {}. received {}".format(self.max, value)
             raise ValueError(msg)
 
-        return value
+        return value, False
 
 
 class BooleanProperty(Property):
+    _trues = ['true', 't', '1', 1, True]
+    _falses = ['false', 'f', '0', 0, False]
 
-    def clean(self, value):
-        if isinstance(value, bool):
-            return value
+    def clean(self, value, allow_custom=False):
 
-        trues = ['true', 't', '1']
-        falses = ['false', 'f', '0']
-        try:
-            if value.lower() in trues:
-                return True
-            if value.lower() in falses:
-                return False
-        except AttributeError:
-            if value == 1:
-                return True
-            if value == 0:
-                return False
+        if isinstance(value, str):
+            value = value.lower()
 
-        raise ValueError("must be a boolean value.")
+        if value in self._trues:
+            result = True
+        elif value in self._falses:
+            result = False
+        else:
+            raise ValueError("must be a boolean value.")
+
+        return result, False
 
 
 class TimestampProperty(Property):
@@ -372,10 +380,10 @@ class TimestampProperty(Property):
 
         super(TimestampProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         return parse_into_datetime(
             value, self.precision, self.precision_constraint,
-        )
+        ), False
 
 
 class DictionaryProperty(Property):
@@ -384,7 +392,7 @@ class DictionaryProperty(Property):
         self.spec_version = spec_version
         super(DictionaryProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         try:
             dictified = _get_dict(value)
         except ValueError:
@@ -409,7 +417,7 @@ class DictionaryProperty(Property):
         if len(dictified) < 1:
             raise ValueError("must not be empty.")
 
-        return dictified
+        return dictified, False
 
 
 HASHES_REGEX = {
@@ -433,8 +441,14 @@ HASHES_REGEX = {
 
 class HashesProperty(DictionaryProperty):
 
-    def clean(self, value):
-        clean_dict = super(HashesProperty, self).clean(value)
+    def clean(self, value, allow_custom):
+        # ignore the has_custom return value here; there is no customization
+        # of DictionaryProperties.
+        clean_dict, _ = super(HashesProperty, self).clean(
+            value, allow_custom,
+        )
+
+        has_custom = False
         for k, v in copy.deepcopy(clean_dict).items():
             key = k.upper().replace('-', '')
             if key in HASHES_REGEX:
@@ -446,25 +460,32 @@ class HashesProperty(DictionaryProperty):
                 if k != vocab_key:
                     clean_dict[vocab_key] = clean_dict[k]
                     del clean_dict[k]
-        return clean_dict
+
+            else:
+                has_custom = True
+
+            if not allow_custom and has_custom:
+                raise CustomContentError("custom hash found: " + k)
+
+        return clean_dict, has_custom
 
 
 class BinaryProperty(Property):
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         try:
             base64.b64decode(value)
         except (binascii.Error, TypeError):
             raise ValueError("must contain a base64 encoded string")
-        return value
+        return value, False
 
 
 class HexProperty(Property):
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         if not re.match(r"^([a-fA-F0-9]{2})+$", value):
             raise ValueError("must contain an even number of hexadecimal characters")
-        return value
+        return value, False
 
 
 class ReferenceProperty(Property):
@@ -493,31 +514,52 @@ class ReferenceProperty(Property):
 
         super(ReferenceProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom):
         if isinstance(value, _STIXBase):
             value = value.id
         value = str(value)
 
-        possible_prefix = value[:value.index('--')]
+        _validate_id(value, self.spec_version, None)
+
+        obj_type = value[:value.index('--')]
 
         if self.valid_types:
+            # allow_custom is not applicable to "whitelist" style object type
+            # constraints, so we ignore it.
+            has_custom = False
+
             ref_valid_types = enumerate_types(self.valid_types, self.spec_version)
 
-            if possible_prefix in ref_valid_types:
-                required_prefix = possible_prefix
-            else:
-                raise ValueError("The type-specifying prefix '%s' for this property is not valid" % (possible_prefix))
-        elif self.invalid_types:
+            if obj_type not in ref_valid_types:
+                raise ValueError("The type-specifying prefix '%s' for this property is not valid" % (obj_type))
+
+        else:
+            # A type "blacklist" was used to describe legal object types.
+            # We must enforce the type blacklist regardless of allow_custom.
             ref_invalid_types = enumerate_types(self.invalid_types, self.spec_version)
 
-            if possible_prefix not in ref_invalid_types:
-                required_prefix = possible_prefix
-            else:
-                raise ValueError("An invalid type-specifying prefix '%s' was specified for this property" % (possible_prefix))
+            if obj_type in ref_invalid_types:
+                raise ValueError("An invalid type-specifying prefix '%s' was specified for this property" % (obj_type))
 
-        _validate_id(value, self.spec_version, required_prefix)
+            # allow_custom=True only allows references to custom objects which
+            # are not otherwise blacklisted.  So we need to figure out whether
+            # the referenced object is custom or not.  No good way to do that
+            # at present... just check if unregistered and for the "x-" type
+            # prefix, for now?
+            type_maps = STIX2_OBJ_MAPS[self.spec_version]
 
-        return value
+            has_custom = obj_type not in type_maps["objects"] \
+                and obj_type not in type_maps["observables"] \
+                and obj_type not in ["relationship", "sighting"]
+
+            has_custom = has_custom or obj_type.startswith("x-")
+
+            if not allow_custom and has_custom:
+                raise CustomContentError(
+                    "reference to custom object type: " + obj_type,
+                )
+
+        return value, has_custom
 
 
 def enumerate_types(types, spec_version):
@@ -529,8 +571,7 @@ def enumerate_types(types, spec_version):
         once each of those words is being processed, that word will be removed from `return_types`,
         so as not to mistakenly allow objects to be created of types "SCO", "SDO", or "SRO"
     """
-    return_types = []
-    return_types += types
+    return_types = types[:]
 
     if "SDO" in types:
         return_types.remove("SDO")
@@ -550,10 +591,10 @@ SELECTOR_REGEX = re.compile(r"^([a-z0-9_-]{3,250}(\.(\[\d+\]|[a-z0-9_-]{1,250}))
 
 class SelectorProperty(Property):
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         if not SELECTOR_REGEX.match(value):
             raise ValueError("must adhere to selector syntax.")
-        return value
+        return value, False
 
 
 class ObjectReferenceProperty(StringProperty):
@@ -571,12 +612,20 @@ class EmbeddedObjectProperty(Property):
         self.type = type
         super(EmbeddedObjectProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
-        if type(value) is dict:
-            value = self.type(**value)
+    def clean(self, value, allow_custom):
+        if isinstance(value, dict):
+            value = self.type(allow_custom=allow_custom, **value)
         elif not isinstance(value, self.type):
             raise ValueError("must be of type {}.".format(self.type.__name__))
-        return value
+
+        has_custom = False
+        if isinstance(value, _STIXBase):
+            has_custom = value.has_custom
+
+        if not allow_custom and has_custom:
+            raise CustomContentError("custom content encountered")
+
+        return value, has_custom
 
 
 class EnumProperty(StringProperty):
@@ -587,12 +636,14 @@ class EnumProperty(StringProperty):
         self.allowed = allowed
         super(EnumProperty, self).__init__(**kwargs)
 
-    def clean(self, value):
-        cleaned_value = super(EnumProperty, self).clean(value)
-        if cleaned_value not in self.allowed:
+    def clean(self, value, allow_custom):
+        cleaned_value, _ = super(EnumProperty, self).clean(value, allow_custom)
+        has_custom = cleaned_value not in self.allowed
+
+        if not allow_custom and has_custom:
             raise ValueError("value '{}' is not valid for this enumeration.".format(cleaned_value))
 
-        return cleaned_value
+        return cleaned_value, has_custom
 
 
 class PatternProperty(StringProperty):
@@ -603,12 +654,11 @@ class ObservableProperty(Property):
     """Property for holding Cyber Observable Objects.
     """
 
-    def __init__(self, spec_version=DEFAULT_VERSION, allow_custom=False, *args, **kwargs):
-        self.allow_custom = allow_custom
+    def __init__(self, spec_version=DEFAULT_VERSION, *args, **kwargs):
         self.spec_version = spec_version
         super(ObservableProperty, self).__init__(*args, **kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom):
         try:
             dictified = _get_dict(value)
             # get deep copy since we are going modify the dict and might
@@ -622,28 +672,43 @@ class ObservableProperty(Property):
 
         valid_refs = dict((k, v['type']) for (k, v) in dictified.items())
 
+        has_custom = False
         for key, obj in dictified.items():
             parsed_obj = parse_observable(
                 obj,
                 valid_refs,
-                allow_custom=self.allow_custom,
+                allow_custom=allow_custom,
                 version=self.spec_version,
             )
+
+            if isinstance(parsed_obj, _STIXBase):
+                has_custom = has_custom or parsed_obj.has_custom
+            else:
+                # we get dicts for unregistered custom objects
+                has_custom = True
+
+            if not allow_custom and has_custom:
+                if parsed_obj.has_custom:
+                    raise CustomContentError(
+                        "customized {} observable found".format(
+                            parsed_obj["type"],
+                        ),
+                    )
+
             dictified[key] = parsed_obj
 
-        return dictified
+        return dictified, has_custom
 
 
 class ExtensionsProperty(DictionaryProperty):
     """Property for representing extensions on Observable objects.
     """
 
-    def __init__(self, spec_version=DEFAULT_VERSION, allow_custom=False, enclosing_type=None, required=False):
-        self.allow_custom = allow_custom
+    def __init__(self, spec_version=DEFAULT_VERSION, enclosing_type=None, required=False):
         self.enclosing_type = enclosing_type
         super(ExtensionsProperty, self).__init__(spec_version=spec_version, required=required)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom):
         try:
             dictified = _get_dict(value)
             # get deep copy since we are going modify the dict and might
@@ -653,37 +718,47 @@ class ExtensionsProperty(DictionaryProperty):
         except ValueError:
             raise ValueError("The extensions property must contain a dictionary")
 
+        has_custom = False
         specific_type_map = STIX2_OBJ_MAPS[self.spec_version]['observable-extensions'].get(self.enclosing_type, {})
         for key, subvalue in dictified.items():
             if key in specific_type_map:
                 cls = specific_type_map[key]
                 if type(subvalue) is dict:
-                    if self.allow_custom:
-                        subvalue['allow_custom'] = True
-                        dictified[key] = cls(**subvalue)
-                    else:
-                        dictified[key] = cls(**subvalue)
+                    ext = cls(allow_custom=allow_custom, **subvalue)
                 elif type(subvalue) is cls:
                     # If already an instance of an _Extension class, assume it's valid
-                    dictified[key] = subvalue
+                    ext = subvalue
                 else:
                     raise ValueError("Cannot determine extension type.")
+
+                has_custom = has_custom or ext.has_custom
+
+                if not allow_custom and has_custom:
+                    raise CustomContentError(
+                        "custom content found in {} extension".format(
+                            key,
+                        ),
+                    )
+
+                dictified[key] = ext
+
             else:
-                if self.allow_custom:
+                if allow_custom:
+                    has_custom = True
                     dictified[key] = subvalue
                 else:
                     raise CustomContentError("Can't parse unknown extension type: {}".format(key))
-        return dictified
+
+        return dictified, has_custom
 
 
 class STIXObjectProperty(Property):
 
-    def __init__(self, spec_version=DEFAULT_VERSION, allow_custom=False, *args, **kwargs):
-        self.allow_custom = allow_custom
+    def __init__(self, spec_version=DEFAULT_VERSION, *args, **kwargs):
         self.spec_version = spec_version
         super(STIXObjectProperty, self).__init__(*args, **kwargs)
 
-    def clean(self, value):
+    def clean(self, value, allow_custom):
         # Any STIX Object (SDO, SRO, or Marking Definition) can be added to
         # a bundle with no further checks.
         if any(
@@ -702,7 +777,11 @@ class STIXObjectProperty(Property):
                     "containing objects of a different spec "
                     "version.",
                 )
-            return value
+
+            if not allow_custom and value.has_custom:
+                raise CustomContentError("custom content encountered")
+
+            return value, value.has_custom
         try:
             dictified = _get_dict(value)
         except ValueError:
@@ -718,6 +797,22 @@ class STIXObjectProperty(Property):
                 "containing objects of a different spec version.",
             )
 
-        parsed_obj = parse(dictified, allow_custom=self.allow_custom)
+        parsed_obj = parse(dictified, allow_custom=allow_custom)
 
-        return parsed_obj
+        if isinstance(parsed_obj, _STIXBase):
+            has_custom = parsed_obj.has_custom
+        else:
+            # we get dicts for unregistered custom objects
+            has_custom = True
+
+        if not allow_custom and has_custom:
+            # parse() will ignore the caller's allow_custom=False request if
+            # the object type is registered and dictified has a
+            # "custom_properties" key.  So we have to do another check here.
+            raise CustomContentError(
+                "customized {} object found".format(
+                    parsed_obj["type"],
+                ),
+            )
+
+        return parsed_obj, has_custom
diff --git a/stix2/test/test_properties.py b/stix2/test/test_properties.py
index dab713e..b8a589c 100644
--- a/stix2/test/test_properties.py
+++ b/stix2/test/test_properties.py
@@ -4,7 +4,10 @@ import pytest
 import pytz
 
 import stix2
-from stix2.exceptions import ExtraPropertiesError, STIXError
+from stix2.base import _STIXBase
+from stix2.exceptions import (
+    ExtraPropertiesError, STIXError, CustomContentError,
+)
 from stix2.properties import (
     BinaryProperty, BooleanProperty, EmbeddedObjectProperty, EnumProperty,
     FloatProperty, HexProperty, IntegerProperty, ListProperty, Property,
@@ -16,8 +19,8 @@ def test_property():
     p = Property()
 
     assert p.required is False
-    assert p.clean('foo') == 'foo'
-    assert p.clean(3) == 3
+    assert p.clean('foo') == ('foo', False)
+    assert p.clean(3) == (3, False)
 
 
 def test_basic_clean():
@@ -47,7 +50,7 @@ def test_property_default():
     assert p.default() == 77
 
 
-def test_property_fixed():
+def test_fixed_property():
     p = Property(fixed="2.0")
 
     assert p.clean("2.0")
@@ -65,16 +68,16 @@ def test_property_fixed_and_required():
         Property(default=lambda: 3, required=True)
 
 
-def test_list_property():
+def test_list_property_property_type():
     p = ListProperty(StringProperty)
 
-    assert p.clean(['abc', 'xyz'])
+    assert p.clean(['abc', 'xyz'], False)
     with pytest.raises(ValueError):
-        p.clean([])
+        p.clean([], False)
 
 
 def test_list_property_property_type_custom():
-    class TestObj(stix2.base._STIXBase):
+    class TestObj(_STIXBase):
         _type = "test"
         _properties = {
             "foo": StringProperty(),
@@ -86,20 +89,24 @@ def test_list_property_property_type_custom():
         TestObj(foo="xyz"),
     ]
 
-    assert p.clean(objs_custom)
+    assert p.clean(objs_custom, True)
+
+    with pytest.raises(CustomContentError):
+        p.clean(objs_custom, False)
 
     dicts_custom = [
         {"foo": "abc", "bar": 123},
         {"foo": "xyz"},
     ]
 
-    # no opportunity to set allow_custom=True when using dicts
+    assert p.clean(dicts_custom, True)
+
     with pytest.raises(ExtraPropertiesError):
-        p.clean(dicts_custom)
+        p.clean(dicts_custom, False)
 
 
 def test_list_property_object_type():
-    class TestObj(stix2.base._STIXBase):
+    class TestObj(_STIXBase):
         _type = "test"
         _properties = {
             "foo": StringProperty(),
@@ -107,14 +114,14 @@ def test_list_property_object_type():
     p = ListProperty(TestObj)
 
     objs = [TestObj(foo="abc"), TestObj(foo="xyz")]
-    assert p.clean(objs)
+    assert p.clean(objs, False)
 
     dicts = [{"foo": "abc"}, {"foo": "xyz"}]
-    assert p.clean(dicts)
+    assert p.clean(dicts, False)
 
 
 def test_list_property_object_type_custom():
-    class TestObj(stix2.base._STIXBase):
+    class TestObj(_STIXBase):
         _type = "test"
         _properties = {
             "foo": StringProperty(),
@@ -126,16 +133,20 @@ def test_list_property_object_type_custom():
         TestObj(foo="xyz"),
     ]
 
-    assert p.clean(objs_custom)
+    assert p.clean(objs_custom, True)
+
+    with pytest.raises(CustomContentError):
+        p.clean(objs_custom, False)
 
     dicts_custom = [
         {"foo": "abc", "bar": 123},
         {"foo": "xyz"},
     ]
 
-    # no opportunity to set allow_custom=True when using dicts
+    assert p.clean(dicts_custom, True)
+
     with pytest.raises(ExtraPropertiesError):
-        p.clean(dicts_custom)
+        p.clean(dicts_custom, False)
 
 
 def test_list_property_bad_element_type():
@@ -144,7 +155,7 @@ def test_list_property_bad_element_type():
 
 
 def test_list_property_bad_value_type():
-    class TestObj(stix2.base._STIXBase):
+    class TestObj(_STIXBase):
         _type = "test"
         _properties = {
             "foo": StringProperty(),
@@ -152,7 +163,7 @@ def test_list_property_bad_value_type():
 
     list_prop = ListProperty(TestObj)
     with pytest.raises(ValueError):
-        list_prop.clean([1])
+        list_prop.clean([1], False)
 
 
 def test_string_property():
@@ -296,7 +307,7 @@ def test_boolean_property_invalid(value):
 )
 def test_timestamp_property_valid(value):
     ts_prop = TimestampProperty()
-    assert ts_prop.clean(value) == dt.datetime(2017, 1, 1, 12, 34, 56, tzinfo=pytz.utc)
+    assert ts_prop.clean(value) == (dt.datetime(2017, 1, 1, 12, 34, 56, tzinfo=pytz.utc), False)
 
 
 def test_timestamp_property_invalid():
@@ -332,15 +343,21 @@ def test_hex_property():
 )
 def test_enum_property_valid(value):
     enum_prop = EnumProperty(value)
-    assert enum_prop.clean('b')
+    assert enum_prop.clean('b', False)
 
 
 def test_enum_property_clean():
     enum_prop = EnumProperty(['1'])
-    assert enum_prop.clean(1) == '1'
+    assert enum_prop.clean(1, False) == ('1', False)
 
 
 def test_enum_property_invalid():
     enum_prop = EnumProperty(['a', 'b', 'c'])
     with pytest.raises(ValueError):
-        enum_prop.clean('z')
+        enum_prop.clean('z', False)
+
+
+def test_enum_property_custom():
+    enum_prop = EnumProperty(['a', 'b', 'c'])
+    result = enum_prop.clean("z", True)
+    assert result == ("z", True)
diff --git a/stix2/test/test_workbench.py b/stix2/test/test_workbench.py
index 433bf81..84f97a5 100644
--- a/stix2/test/test_workbench.py
+++ b/stix2/test/test_workbench.py
@@ -369,6 +369,7 @@ def test_workbench_custom_property_object_in_observable_extension():
         x_foo='bar',
     )
     artifact = File(
+        allow_custom=True,
         name='test',
         extensions={'ntfs-ext': ntfs},
     )
@@ -390,7 +391,6 @@ def test_workbench_custom_property_dict_in_observable_extension():
         name='test',
         extensions={
             'ntfs-ext': {
-                'allow_custom': True,
                 'sid': 1,
                 'x_foo': 'bar',
             },
diff --git a/stix2/test/v20/test_bundle.py b/stix2/test/v20/test_bundle.py
index ac5d239..990a554 100644
--- a/stix2/test/v20/test_bundle.py
+++ b/stix2/test/v20/test_bundle.py
@@ -224,7 +224,7 @@ def test_stix_object_property():
     prop = stix2.properties.STIXObjectProperty(spec_version='2.0')
 
     identity = stix2.v20.Identity(name="test", identity_class="individual")
-    assert prop.clean(identity) is identity
+    assert prop.clean(identity, False) == (identity, False)
 
 
 def test_bundle_with_different_spec_objects():
diff --git a/stix2/test/v20/test_custom.py b/stix2/test/v20/test_custom.py
index a83bf24..8d237e0 100644
--- a/stix2/test/v20/test_custom.py
+++ b/stix2/test/v20/test_custom.py
@@ -157,10 +157,11 @@ def test_custom_properties_dict_in_bundled_object():
             'x_foo': 'bar',
         },
     }
-    bundle = stix2.v20.Bundle(custom_identity)
 
-    assert bundle.objects[0].x_foo == "bar"
-    assert '"x_foo": "bar"' in str(bundle)
+    # must not succeed: allow_custom was not set to True when creating
+    # the bundle, so it must reject the customized identity object.
+    with pytest.raises(InvalidValueError):
+        stix2.v20.Bundle(custom_identity)
 
 
 def test_custom_property_in_observed_data():
@@ -188,6 +189,7 @@ def test_custom_property_object_in_observable_extension():
         x_foo='bar',
     )
     artifact = stix2.v20.File(
+        allow_custom=True,
         name='test',
         extensions={'ntfs-ext': ntfs},
     )
@@ -220,7 +222,6 @@ def test_custom_property_dict_in_observable_extension():
         name='test',
         extensions={
             'ntfs-ext': {
-                'allow_custom': True,
                 'sid': 1,
                 'x_foo': 'bar',
             },
@@ -384,6 +385,47 @@ def test_custom_object_invalid_type_name():
     assert "Invalid type name 'x_new_object':" in str(excinfo.value)
 
 
+def test_custom_subobject_dict():
+    obj_dict = {
+        "type": "bundle",
+        "spec_version": "2.0",
+        "objects": [
+            {
+                "type": "identity",
+                "name": "alice",
+                "identity_class": "individual",
+                "x_foo": 123,
+            },
+        ],
+    }
+
+    obj = stix2.parse(obj_dict, allow_custom=True)
+    assert obj["objects"][0]["x_foo"] == 123
+    assert obj.has_custom
+
+    with pytest.raises(InvalidValueError):
+        stix2.parse(obj_dict, allow_custom=False)
+
+
+def test_custom_subobject_obj():
+    ident = stix2.v20.Identity(
+        name="alice", identity_class=123, x_foo=123, allow_custom=True,
+    )
+
+    obj_dict = {
+        "type": "bundle",
+        "spec_version": "2.0",
+        "objects": [ident],
+    }
+
+    obj = stix2.parse(obj_dict, allow_custom=True)
+    assert obj["objects"][0]["x_foo"] == 123
+    assert obj.has_custom
+
+    with pytest.raises(InvalidValueError):
+        stix2.parse(obj_dict, allow_custom=False)
+
+
 def test_parse_custom_object_type():
     nt_string = """{
         "type": "x-new-type",
@@ -898,6 +940,35 @@ def test_parse_observable_with_custom_extension():
     assert parsed.extensions['x-new-ext'].property2 == 12
 
 
+def test_parse_observable_with_custom_extension_property():
+    input_str = """{
+        "type": "observed-data",
+        "first_observed": "1976-09-09T01:50:24.000Z",
+        "last_observed": "1988-01-18T15:22:10.000Z",
+        "number_observed": 5,
+        "objects": {
+            "0": {
+                "type": "file",
+                "name": "cats.png",
+                "extensions": {
+                    "raster-image-ext": {
+                        "image_height": 1024,
+                        "image_width": 768,
+                        "x-foo": false
+                    }
+                }
+            }
+        }
+    }"""
+
+    parsed = stix2.parse(input_str, version='2.0', allow_custom=True)
+    assert parsed.has_custom
+    assert parsed["objects"]["0"]["extensions"]["raster-image-ext"]["x-foo"] is False
+
+    with pytest.raises(InvalidValueError):
+        stix2.parse(input_str, version="2.0", allow_custom=False)
+
+
 def test_custom_and_spec_extension_mix():
     """
     Try to make sure that when allow_custom=True, encountering a custom
diff --git a/stix2/test/v20/test_properties.py b/stix2/test/v20/test_properties.py
index b03879c..3ff207a 100644
--- a/stix2/test/v20/test_properties.py
+++ b/stix2/test/v20/test_properties.py
@@ -3,14 +3,14 @@ import uuid
 import pytest
 
 import stix2
-import stix2.base
 from stix2.exceptions import (
     AtLeastOnePropertyError, CustomContentError, DictionaryKeyError,
+    ExtraPropertiesError, ParseError,
 )
 from stix2.properties import (
     DictionaryProperty, EmbeddedObjectProperty, ExtensionsProperty,
-    HashesProperty, IDProperty, ListProperty, ReferenceProperty,
-    STIXObjectProperty,
+    HashesProperty, ListProperty, ObservableProperty, ReferenceProperty,
+    STIXObjectProperty, IDProperty,
 )
 from stix2.v20.common import MarkingProperty
 
@@ -27,7 +27,7 @@ MY_ID = 'my-type--232c9d3f-49fc-4440-bb01-607f638778e7'
     ],
 )
 def test_id_property_valid(value):
-    assert ID_PROP.clean(value) == value
+    assert ID_PROP.clean(value) == (value, False)
 
 
 CONSTANT_IDS = [
@@ -54,7 +54,7 @@ CONSTANT_IDS.extend(constants.RELATIONSHIP_IDS)
 @pytest.mark.parametrize("value", CONSTANT_IDS)
 def test_id_property_valid_for_type(value):
     type = value.split('--', 1)[0]
-    assert IDProperty(type=type, spec_version="2.0").clean(value) == value
+    assert IDProperty(type=type, spec_version="2.0").clean(value) == (value, False)
 
 
 def test_id_property_wrong_type():
@@ -80,29 +80,63 @@ def test_id_property_not_a_valid_hex_uuid(value):
 
 def test_id_property_default():
     default = ID_PROP.default()
-    assert ID_PROP.clean(default) == default
+    assert ID_PROP.clean(default) == (default, False)
 
 
 def test_reference_property():
     ref_prop = ReferenceProperty(valid_types="my-type", spec_version="2.0")
 
-    assert ref_prop.clean("my-type--00000000-0000-4000-8000-000000000000")
+    assert ref_prop.clean("my-type--00000000-0000-4000-8000-000000000000", False)
     with pytest.raises(ValueError):
-        ref_prop.clean("foo")
+        ref_prop.clean("foo", False)
 
     # This is not a valid V4 UUID
     with pytest.raises(ValueError):
-        ref_prop.clean("my-type--00000000-0000-0000-0000-000000000000")
+        ref_prop.clean("my-type--00000000-0000-0000-0000-000000000000", False)
 
 
-def test_reference_property_specific_type():
+def test_reference_property_whitelist_type():
     ref_prop = ReferenceProperty(valid_types="my-type", spec_version="2.0")
 
     with pytest.raises(ValueError):
-        ref_prop.clean("not-my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf")
+        ref_prop.clean("not-my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
 
-    assert ref_prop.clean("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf") == \
-        "my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf"
+    with pytest.raises(ValueError):
+        ref_prop.clean("not-my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True)
+
+    result = ref_prop.clean("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True)
+    assert result == ("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+    result = ref_prop.clean("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+    assert result == ("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+
+def test_reference_property_blacklist_type():
+    ref_prop = ReferenceProperty(invalid_types="identity", spec_version="2.0")
+    result = ref_prop.clean(
+        "malware--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False,
+    )
+    assert result == ("malware--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+    result = ref_prop.clean(
+        "malware--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True,
+    )
+    assert result == ("malware--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+    result = ref_prop.clean(
+        "some-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True,
+    )
+    assert result == ("some-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True)
+
+    with pytest.raises(ValueError):
+        ref_prop.clean(
+            "identity--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False,
+        )
+
+    with pytest.raises(ValueError):
+        ref_prop.clean(
+            "identity--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True,
+        )
 
 
 @pytest.mark.parametrize(
@@ -183,7 +217,8 @@ def test_property_list_of_dictionary():
 )
 def test_hashes_property_valid(value):
     hash_prop = HashesProperty()
-    assert hash_prop.clean(value)
+    _, has_custom = hash_prop.clean(value, False)
+    assert not has_custom
 
 
 @pytest.mark.parametrize(
@@ -196,7 +231,21 @@ def test_hashes_property_invalid(value):
     hash_prop = HashesProperty()
 
     with pytest.raises(ValueError):
-        hash_prop.clean(value)
+        hash_prop.clean(value, False)
+
+
+def test_hashes_property_custom():
+    value = {
+        "sha256": "6db12788c37247f2316052e142f42f4b259d6561751e5f401a1ae2a6df9c674b",
+        "abc-123": "aaaaaaaaaaaaaaaaaaaaa",
+    }
+
+    hash_prop = HashesProperty()
+    result = hash_prop.clean(value, True)
+    assert result == (value, True)
+
+    with pytest.raises(CustomContentError):
+        hash_prop.clean(value, False)
 
 
 def test_embedded_property():
@@ -206,25 +255,103 @@ def test_embedded_property():
         content_disposition="inline",
         body="Cats are funny!",
     )
-    assert emb_prop.clean(mime)
+    result = emb_prop.clean(mime, False)
+    assert result == (mime, False)
+
+    result = emb_prop.clean(mime, True)
+    assert result == (mime, False)
 
     with pytest.raises(ValueError):
-        emb_prop.clean("string")
+        emb_prop.clean("string", False)
+
+
+def test_embedded_property_dict():
+    emb_prop = EmbeddedObjectProperty(type=stix2.v20.EmailMIMEComponent)
+    mime = {
+        "content_type": "text/plain; charset=utf-8",
+        "content_disposition": "inline",
+        "body": "Cats are funny!",
+    }
+
+    result = emb_prop.clean(mime, False)
+    assert isinstance(result[0], stix2.v20.EmailMIMEComponent)
+    assert result[0]["body"] == "Cats are funny!"
+    assert not result[1]
+
+    result = emb_prop.clean(mime, True)
+    assert isinstance(result[0], stix2.v20.EmailMIMEComponent)
+    assert result[0]["body"] == "Cats are funny!"
+    assert not result[1]
+
+
+def test_embedded_property_custom():
+    emb_prop = EmbeddedObjectProperty(type=stix2.v20.EmailMIMEComponent)
+    mime = stix2.v20.EmailMIMEComponent(
+        content_type="text/plain; charset=utf-8",
+        content_disposition="inline",
+        body="Cats are funny!",
+        foo=123,
+        allow_custom=True,
+    )
+
+    with pytest.raises(CustomContentError):
+        emb_prop.clean(mime, False)
+
+    result = emb_prop.clean(mime, True)
+    assert result == (mime, True)
+
+
+def test_embedded_property_dict_custom():
+    emb_prop = EmbeddedObjectProperty(type=stix2.v20.EmailMIMEComponent)
+    mime = {
+        "content_type": "text/plain; charset=utf-8",
+        "content_disposition": "inline",
+        "body": "Cats are funny!",
+        "foo": 123,
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        emb_prop.clean(mime, False)
+
+    result = emb_prop.clean(mime, True)
+    assert isinstance(result[0], stix2.v20.EmailMIMEComponent)
+    assert result[0]["body"] == "Cats are funny!"
+    assert result[1]
 
 
 def test_extension_property_valid():
     ext_prop = ExtensionsProperty(spec_version="2.0", enclosing_type='file')
-    assert ext_prop({
-        'windows-pebinary-ext': {
-            'pe_type': 'exe',
-        },
-    })
+    result = ext_prop.clean(
+        {
+            'windows-pebinary-ext': {
+                'pe_type': 'exe',
+            },
+        }, False,
+    )
+
+    assert isinstance(
+        result[0]["windows-pebinary-ext"], stix2.v20.WindowsPEBinaryExt,
+    )
+    assert not result[1]
+
+    result = ext_prop.clean(
+        {
+            'windows-pebinary-ext': {
+                'pe_type': 'exe',
+            },
+        }, True,
+    )
+
+    assert isinstance(
+        result[0]["windows-pebinary-ext"], stix2.v20.WindowsPEBinaryExt,
+    )
+    assert not result[1]
 
 
 def test_extension_property_invalid1():
     ext_prop = ExtensionsProperty(spec_version="2.0", enclosing_type='file')
     with pytest.raises(ValueError):
-        ext_prop.clean(1)
+        ext_prop.clean(1, False)
 
 
 def test_extension_property_invalid2():
@@ -236,8 +363,47 @@ def test_extension_property_invalid2():
                     'pe_type': 'exe',
                 },
             },
+            False,
         )
 
+    result = ext_prop.clean(
+        {
+            'foobar-ext': {
+                'pe_type': 'exe',
+            },
+        }, True,
+    )
+    assert result == ({"foobar-ext": {"pe_type": "exe"}}, True)
+
+
+def test_extension_property_invalid3():
+    ext_prop = ExtensionsProperty(spec_version="2.0", enclosing_type='file')
+    with pytest.raises(ExtraPropertiesError):
+        ext_prop.clean(
+            {
+                'windows-pebinary-ext': {
+                    'pe_type': 'exe',
+                    'abc': 123,
+                },
+            },
+            False,
+        )
+
+    result = ext_prop.clean(
+        {
+            'windows-pebinary-ext': {
+                'pe_type': 'exe',
+                'abc': 123,
+            },
+        }, True,
+    )
+
+    assert isinstance(
+        result[0]["windows-pebinary-ext"], stix2.v20.WindowsPEBinaryExt,
+    )
+    assert result[0]["windows-pebinary-ext"]["abc"] == 123
+    assert result[1]
+
 
 def test_extension_property_invalid_type():
     ext_prop = ExtensionsProperty(spec_version="2.0", enclosing_type='indicator')
@@ -248,6 +414,7 @@ def test_extension_property_invalid_type():
                     'pe_type': 'exe',
                 },
             },
+            False,
         )
     assert "Can't parse unknown extension" in str(excinfo.value)
 
@@ -272,6 +439,116 @@ def test_stix_property_not_compliant_spec():
     stix_prop = STIXObjectProperty(spec_version="2.0")
 
     with pytest.raises(ValueError) as excinfo:
-        stix_prop.clean(indicator)
+        stix_prop.clean(indicator, False)
 
     assert "Spec version 2.0 bundles don't yet support containing objects of a different spec version." in str(excinfo.value)
+
+
+def test_observable_property_obj():
+    prop = ObservableProperty(spec_version="2.0")
+
+    obs = stix2.v20.File(name="data.dat")
+    obs_dict = {
+        "0": obs,
+    }
+
+    result = prop.clean(obs_dict, False)
+    assert result[0]["0"] == obs
+    assert not result[1]
+
+    result = prop.clean(obs_dict, True)
+    assert result[0]["0"] == obs
+    assert not result[1]
+
+
+def test_observable_property_dict():
+    prop = ObservableProperty(spec_version="2.0")
+
+    obs_dict = {
+        "0": {
+            "type": "file",
+            "name": "data.dat",
+        },
+    }
+
+    result = prop.clean(obs_dict, False)
+    assert isinstance(result[0]["0"], stix2.v20.File)
+    assert result[0]["0"]["name"] == "data.dat"
+    assert not result[1]
+
+    result = prop.clean(obs_dict, True)
+    assert isinstance(result[0]["0"], stix2.v20.File)
+    assert result[0]["0"]["name"] == "data.dat"
+    assert not result[1]
+
+
+def test_observable_property_obj_custom():
+    prop = ObservableProperty(spec_version="2.0")
+
+    obs = stix2.v20.File(name="data.dat", foo=True, allow_custom=True)
+    obs_dict = {
+        "0": obs,
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        prop.clean(obs_dict, False)
+
+    result = prop.clean(obs_dict, True)
+    assert result[0]["0"] == obs
+    assert result[1]
+
+
+def test_observable_property_dict_custom():
+    prop = ObservableProperty(spec_version="2.0")
+
+    obs_dict = {
+        "0": {
+            "type": "file",
+            "name": "data.dat",
+            "foo": True,
+        },
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        prop.clean(obs_dict, False)
+
+    result = prop.clean(obs_dict, True)
+    assert isinstance(result[0]["0"], stix2.v20.File)
+    assert result[0]["0"]["foo"]
+    assert result[1]
+
+
+def test_stix_object_property_custom_prop():
+    prop = STIXObjectProperty(spec_version="2.0")
+
+    obj_dict = {
+        "type": "identity",
+        "name": "alice",
+        "identity_class": "supergirl",
+        "foo": "bar",
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        prop.clean(obj_dict, False)
+
+    result = prop.clean(obj_dict, True)
+    assert isinstance(result[0], stix2.v20.Identity)
+    assert result[0]["foo"] == "bar"
+    assert result[1]
+
+
+def test_stix_object_property_custom_obj():
+    prop = STIXObjectProperty(spec_version="2.0")
+
+    obj_dict = {
+        "type": "something",
+        "abc": 123,
+        "xyz": ["a", 1],
+    }
+
+    with pytest.raises(ParseError):
+        prop.clean(obj_dict, False)
+
+    result = prop.clean(obj_dict, True)
+    assert result[0] == {"type": "something", "abc": 123, "xyz": ["a", 1]}
+    assert result[1]
diff --git a/stix2/test/v21/test_bundle.py b/stix2/test/v21/test_bundle.py
index 1cf30d0..a4777d8 100644
--- a/stix2/test/v21/test_bundle.py
+++ b/stix2/test/v21/test_bundle.py
@@ -235,7 +235,7 @@ def test_stix_object_property():
     prop = stix2.properties.STIXObjectProperty(spec_version='2.1')
 
     identity = stix2.v21.Identity(name="test", identity_class="individual")
-    assert prop.clean(identity) is identity
+    assert prop.clean(identity, False) == (identity, False)
 
 
 def test_bundle_obj_id_found():
diff --git a/stix2/test/v21/test_custom.py b/stix2/test/v21/test_custom.py
index 36e3548..1f86a27 100644
--- a/stix2/test/v21/test_custom.py
+++ b/stix2/test/v21/test_custom.py
@@ -206,8 +206,10 @@ def test_custom_properties_dict_in_bundled_object():
             'x_foo': 'bar',
         },
     }
-    bundle = stix2.v21.Bundle(custom_identity)
+    with pytest.raises(InvalidValueError):
+        stix2.v21.Bundle(custom_identity)
 
+    bundle = stix2.v21.Bundle(custom_identity, allow_custom=True)
     assert bundle.objects[0].x_foo == "bar"
     assert '"x_foo": "bar"' in str(bundle)
 
@@ -251,6 +253,7 @@ def test_custom_property_object_in_observable_extension():
         x_foo='bar',
     )
     artifact = stix2.v21.File(
+        allow_custom=True,
         name='test',
         extensions={'ntfs-ext': ntfs},
     )
@@ -283,7 +286,6 @@ def test_custom_property_dict_in_observable_extension():
         name='test',
         extensions={
             'ntfs-ext': {
-                'allow_custom': True,
                 'sid': 1,
                 'x_foo': 'bar',
             },
@@ -506,6 +508,48 @@ def test_custom_object_invalid_type_name():
     assert "Invalid type name '7x-new-object':" in str(excinfo.value)
 
 
+def test_custom_subobject_dict():
+    obj_dict = {
+        "type": "bundle",
+        "id": "bundle--78d99c4a-4eda-4c59-b264-60807f05d799",
+        "objects": [
+            {
+                "type": "identity",
+                "spec_version": "2.1",
+                "name": "alice",
+                "identity_class": "individual",
+                "x_foo": 123,
+            },
+        ],
+    }
+
+    obj = stix2.parse(obj_dict, allow_custom=True)
+    assert obj["objects"][0]["x_foo"] == 123
+    assert obj.has_custom
+
+    with pytest.raises(InvalidValueError):
+        stix2.parse(obj_dict, allow_custom=False)
+
+
+def test_custom_subobject_obj():
+    ident = stix2.v21.Identity(
+        name="alice", identity_class=123, x_foo=123, allow_custom=True,
+    )
+
+    obj_dict = {
+        "type": "bundle",
+        "id": "bundle--78d99c4a-4eda-4c59-b264-60807f05d799",
+        "objects": [ident],
+    }
+
+    obj = stix2.parse(obj_dict, allow_custom=True)
+    assert obj["objects"][0]["x_foo"] == 123
+    assert obj.has_custom
+
+    with pytest.raises(InvalidValueError):
+        stix2.parse(obj_dict, allow_custom=False)
+
+
 def test_parse_custom_object_type():
     nt_string = """{
         "type": "x-new-type",
@@ -1117,6 +1161,37 @@ def test_parse_observable_with_custom_extension():
     assert parsed.extensions['x-new-ext'].property2 == 12
 
 
+def test_parse_observable_with_custom_extension_property():
+    input_str = """{
+        "type": "observed-data",
+        "spec_version": "2.1",
+        "first_observed": "1976-09-09T01:50:24.000Z",
+        "last_observed": "1988-01-18T15:22:10.000Z",
+        "number_observed": 5,
+        "objects": {
+            "0": {
+                "type": "file",
+                "spec_version": "2.1",
+                "name": "cats.png",
+                "extensions": {
+                    "raster-image-ext": {
+                        "image_height": 1024,
+                        "image_width": 768,
+                        "x-foo": false
+                    }
+                }
+            }
+        }
+    }"""
+
+    parsed = stix2.parse(input_str, version='2.1', allow_custom=True)
+    assert parsed.has_custom
+    assert parsed["objects"]["0"]["extensions"]["raster-image-ext"]["x-foo"] is False
+
+    with pytest.raises(InvalidValueError):
+        stix2.parse(input_str, version="2.1", allow_custom=False)
+
+
 def test_custom_and_spec_extension_mix():
     """
     Try to make sure that when allow_custom=True, encountering a custom
@@ -1337,3 +1412,42 @@ def test_register_duplicate_observable_extension():
         class NewExtension2():
             pass
     assert "cannot be registered again" in str(excinfo.value)
+
+
+def test_register_duplicate_marking():
+    with pytest.raises(DuplicateRegistrationError) as excinfo:
+        @stix2.v21.CustomMarking(
+            'x-new-obj', [
+                ('property1', stix2.properties.StringProperty(required=True)),
+            ],
+        )
+        class NewObj2():
+            pass
+    assert "cannot be registered again" in str(excinfo.value)
+
+
+def test_allow_custom_propagation():
+    obj_dict = {
+        "type": "bundle",
+        "objects": [
+            {
+                "type": "file",
+                "spec_version": "2.1",
+                "name": "data.dat",
+                "extensions": {
+                    "archive-ext": {
+                        "contains_refs": [
+                            "file--3d4da5f6-31d8-4a66-a172-f31af9bf5238",
+                            "file--4bb16def-cdfc-40d1-b6a4-815de6c60b74",
+                        ],
+                        "x_foo": "bar",
+                    },
+                },
+            },
+        ],
+    }
+
+    # allow_custom=False at the top level should catch the custom property way
+    # down in the SCO extension.
+    with pytest.raises(InvalidValueError):
+        stix2.parse(obj_dict, allow_custom=False)
diff --git a/stix2/test/v21/test_indicator.py b/stix2/test/v21/test_indicator.py
index 2b22418..5f99ac5 100644
--- a/stix2/test/v21/test_indicator.py
+++ b/stix2/test/v21/test_indicator.py
@@ -223,6 +223,7 @@ def test_indicator_with_custom_embedded_objs():
         valid_from=epoch,
         indicator_types=['malicious-activity'],
         external_references=[ext_ref],
+        allow_custom=True,
     )
 
     assert ind.indicator_types == ['malicious-activity']
diff --git a/stix2/test/v21/test_properties.py b/stix2/test/v21/test_properties.py
index 36ff858..9914bd1 100644
--- a/stix2/test/v21/test_properties.py
+++ b/stix2/test/v21/test_properties.py
@@ -3,11 +3,12 @@ import pytest
 import stix2
 from stix2.exceptions import (
     AtLeastOnePropertyError, CustomContentError, DictionaryKeyError,
+    ExtraPropertiesError, ParseError,
 )
 from stix2.properties import (
     DictionaryProperty, EmbeddedObjectProperty, ExtensionsProperty,
-    HashesProperty, IDProperty, ListProperty, ReferenceProperty,
-    StringProperty, TypeProperty,
+    HashesProperty, IDProperty, ListProperty, ObservableProperty,
+    ReferenceProperty, STIXObjectProperty, StringProperty, TypeProperty,
 )
 from stix2.v21.common import MarkingProperty
 
@@ -50,7 +51,7 @@ MY_ID = 'my-type--232c9d3f-49fc-4440-bb01-607f638778e7'
     ],
 )
 def test_id_property_valid(value):
-    assert ID_PROP.clean(value) == value
+    assert ID_PROP.clean(value) == (value, False)
 
 
 CONSTANT_IDS = [
@@ -77,7 +78,7 @@ CONSTANT_IDS.extend(constants.RELATIONSHIP_IDS)
 @pytest.mark.parametrize("value", CONSTANT_IDS)
 def test_id_property_valid_for_type(value):
     type = value.split('--', 1)[0]
-    assert IDProperty(type=type, spec_version="2.1").clean(value) == value
+    assert IDProperty(type=type, spec_version="2.1").clean(value) == (value, False)
 
 
 def test_id_property_wrong_type():
@@ -100,29 +101,63 @@ def test_id_property_not_a_valid_hex_uuid(value):
 
 def test_id_property_default():
     default = ID_PROP.default()
-    assert ID_PROP.clean(default) == default
+    assert ID_PROP.clean(default) == (default, False)
 
 
 def test_reference_property():
     ref_prop = ReferenceProperty(valid_types="my-type", spec_version="2.1")
 
-    assert ref_prop.clean("my-type--00000000-0000-4000-8000-000000000000")
+    assert ref_prop.clean("my-type--00000000-0000-4000-8000-000000000000", False)
     with pytest.raises(ValueError):
-        ref_prop.clean("foo")
+        ref_prop.clean("foo", False)
 
     # This is not a valid RFC 4122 UUID
     with pytest.raises(ValueError):
-        ref_prop.clean("my-type--00000000-0000-0000-0000-000000000000")
+        ref_prop.clean("my-type--00000000-0000-0000-0000-000000000000", False)
 
 
-def test_reference_property_specific_type():
+def test_reference_property_whitelist_type():
     ref_prop = ReferenceProperty(valid_types="my-type", spec_version="2.1")
 
     with pytest.raises(ValueError):
-        ref_prop.clean("not-my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf")
+        ref_prop.clean("not-my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
 
-    assert ref_prop.clean("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf") == \
-        "my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf"
+    with pytest.raises(ValueError):
+        ref_prop.clean("not-my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True)
+
+    result = ref_prop.clean("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True)
+    assert result == ("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+    result = ref_prop.clean("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+    assert result == ("my-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+
+def test_reference_property_blacklist_type():
+    ref_prop = ReferenceProperty(invalid_types="identity", spec_version="2.1")
+    result = ref_prop.clean(
+        "location--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False,
+    )
+    assert result == ("location--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+    result = ref_prop.clean(
+        "location--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True,
+    )
+    assert result == ("location--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False)
+
+    result = ref_prop.clean(
+        "some-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True,
+    )
+    assert result == ("some-type--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True)
+
+    with pytest.raises(ValueError):
+        ref_prop.clean(
+            "identity--8a8e8758-f92c-4058-ba38-f061cd42a0cf", False,
+        )
+
+    with pytest.raises(ValueError):
+        ref_prop.clean(
+            "identity--8a8e8758-f92c-4058-ba38-f061cd42a0cf", True,
+        )
 
 
 @pytest.mark.parametrize(
@@ -213,7 +248,11 @@ def test_property_list_of_dictionary():
 )
 def test_hashes_property_valid(value):
     hash_prop = HashesProperty()
-    assert hash_prop.clean(value)
+    _, has_custom = hash_prop.clean(value, False)
+    assert not has_custom
+
+    _, has_custom = hash_prop.clean(value, True)
+    assert not has_custom
 
 
 @pytest.mark.parametrize(
@@ -227,7 +266,24 @@ def test_hashes_property_invalid(value):
     hash_prop = HashesProperty()
 
     with pytest.raises(ValueError):
-        hash_prop.clean(value)
+        hash_prop.clean(value, False)
+
+    with pytest.raises(ValueError):
+        hash_prop.clean(value, True)
+
+
+def test_hashes_property_custom():
+    value = {
+        "sha256": "6db12788c37247f2316052e142f42f4b259d6561751e5f401a1ae2a6df9c674b",
+        "abc-123": "aaaaaaaaaaaaaaaaaaaaa",
+    }
+
+    hash_prop = HashesProperty()
+    result = hash_prop.clean(value, True)
+    assert result == (value, True)
+
+    with pytest.raises(CustomContentError):
+        hash_prop.clean(value, False)
 
 
 def test_embedded_property():
@@ -237,25 +293,103 @@ def test_embedded_property():
         content_disposition="inline",
         body="Cats are funny!",
     )
-    assert emb_prop.clean(mime)
+    result = emb_prop.clean(mime, False)
+    assert result == (mime, False)
+
+    result = emb_prop.clean(mime, True)
+    assert result == (mime, False)
 
     with pytest.raises(ValueError):
-        emb_prop.clean("string")
+        emb_prop.clean("string", False)
+
+
+def test_embedded_property_dict():
+    emb_prop = EmbeddedObjectProperty(type=stix2.v21.EmailMIMEComponent)
+    mime = {
+        "content_type": "text/plain; charset=utf-8",
+        "content_disposition": "inline",
+        "body": "Cats are funny!",
+    }
+
+    result = emb_prop.clean(mime, False)
+    assert isinstance(result[0], stix2.v21.EmailMIMEComponent)
+    assert result[0]["body"] == "Cats are funny!"
+    assert not result[1]
+
+    result = emb_prop.clean(mime, True)
+    assert isinstance(result[0], stix2.v21.EmailMIMEComponent)
+    assert result[0]["body"] == "Cats are funny!"
+    assert not result[1]
+
+
+def test_embedded_property_custom():
+    emb_prop = EmbeddedObjectProperty(type=stix2.v21.EmailMIMEComponent)
+    mime = stix2.v21.EmailMIMEComponent(
+        content_type="text/plain; charset=utf-8",
+        content_disposition="inline",
+        body="Cats are funny!",
+        foo=123,
+        allow_custom=True,
+    )
+
+    with pytest.raises(CustomContentError):
+        emb_prop.clean(mime, False)
+
+    result = emb_prop.clean(mime, True)
+    assert result == (mime, True)
+
+
+def test_embedded_property_dict_custom():
+    emb_prop = EmbeddedObjectProperty(type=stix2.v21.EmailMIMEComponent)
+    mime = {
+        "content_type": "text/plain; charset=utf-8",
+        "content_disposition": "inline",
+        "body": "Cats are funny!",
+        "foo": 123,
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        emb_prop.clean(mime, False)
+
+    result = emb_prop.clean(mime, True)
+    assert isinstance(result[0], stix2.v21.EmailMIMEComponent)
+    assert result[0]["body"] == "Cats are funny!"
+    assert result[1]
 
 
 def test_extension_property_valid():
     ext_prop = ExtensionsProperty(spec_version='2.1', enclosing_type='file')
-    assert ext_prop({
-        'windows-pebinary-ext': {
-            'pe_type': 'exe',
-        },
-    })
+    result = ext_prop.clean(
+        {
+            'windows-pebinary-ext': {
+                'pe_type': 'exe',
+            },
+        }, False,
+    )
+
+    assert isinstance(
+        result[0]["windows-pebinary-ext"], stix2.v21.WindowsPEBinaryExt,
+    )
+    assert not result[1]
+
+    result = ext_prop.clean(
+        {
+            'windows-pebinary-ext': {
+                'pe_type': 'exe',
+            },
+        }, True,
+    )
+
+    assert isinstance(
+        result[0]["windows-pebinary-ext"], stix2.v21.WindowsPEBinaryExt,
+    )
+    assert not result[1]
 
 
 def test_extension_property_invalid1():
     ext_prop = ExtensionsProperty(spec_version='2.1', enclosing_type='file')
     with pytest.raises(ValueError):
-        ext_prop.clean(1)
+        ext_prop.clean(1, False)
 
 
 def test_extension_property_invalid2():
@@ -267,8 +401,47 @@ def test_extension_property_invalid2():
                     'pe_type': 'exe',
                 },
             },
+            False,
         )
 
+    result = ext_prop.clean(
+        {
+            'foobar-ext': {
+                'pe_type': 'exe',
+            },
+        }, True,
+    )
+    assert result == ({"foobar-ext": {"pe_type": "exe"}}, True)
+
+
+def test_extension_property_invalid3():
+    ext_prop = ExtensionsProperty(spec_version="2.1", enclosing_type='file')
+    with pytest.raises(ExtraPropertiesError):
+        ext_prop.clean(
+            {
+                'windows-pebinary-ext': {
+                    'pe_type': 'exe',
+                    'abc': 123,
+                },
+            },
+            False,
+        )
+
+    result = ext_prop.clean(
+        {
+            'windows-pebinary-ext': {
+                'pe_type': 'exe',
+                'abc': 123,
+            },
+        }, True,
+    )
+
+    assert isinstance(
+        result[0]["windows-pebinary-ext"], stix2.v21.WindowsPEBinaryExt,
+    )
+    assert result[0]["windows-pebinary-ext"]["abc"] == 123
+    assert result[1]
+
 
 def test_extension_property_invalid_type():
     ext_prop = ExtensionsProperty(spec_version='2.1', enclosing_type='indicator')
@@ -279,6 +452,7 @@ def test_extension_property_invalid_type():
                     'pe_type': 'exe',
                 },
             },
+            False,
         )
     assert "Can't parse unknown extension" in str(excinfo.value)
 
@@ -295,3 +469,115 @@ def test_marking_property_error():
         mark_prop.clean('my-marking')
 
     assert str(excinfo.value) == "must be a Statement, TLP Marking or a registered marking."
+
+
+def test_observable_property_obj():
+    prop = ObservableProperty(spec_version="2.1")
+
+    obs = stix2.v21.File(name="data.dat")
+    obs_dict = {
+        "0": obs,
+    }
+
+    result = prop.clean(obs_dict, False)
+    assert result[0]["0"] == obs
+    assert not result[1]
+
+    result = prop.clean(obs_dict, True)
+    assert result[0]["0"] == obs
+    assert not result[1]
+
+
+def test_observable_property_dict():
+    prop = ObservableProperty(spec_version="2.1")
+
+    obs_dict = {
+        "0": {
+            "type": "file",
+            "name": "data.dat",
+        },
+    }
+
+    result = prop.clean(obs_dict, False)
+    assert isinstance(result[0]["0"], stix2.v21.File)
+    assert result[0]["0"]["name"] == "data.dat"
+    assert not result[1]
+
+    result = prop.clean(obs_dict, True)
+    assert isinstance(result[0]["0"], stix2.v21.File)
+    assert result[0]["0"]["name"] == "data.dat"
+    assert not result[1]
+
+
+def test_observable_property_obj_custom():
+    prop = ObservableProperty(spec_version="2.1")
+
+    obs = stix2.v21.File(name="data.dat", foo=True, allow_custom=True)
+    obs_dict = {
+        "0": obs,
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        prop.clean(obs_dict, False)
+
+    result = prop.clean(obs_dict, True)
+    assert result[0]["0"] == obs
+    assert result[1]
+
+
+def test_observable_property_dict_custom():
+    prop = ObservableProperty(spec_version="2.1")
+
+    obs_dict = {
+        "0": {
+            "type": "file",
+            "name": "data.dat",
+            "foo": True,
+        },
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        prop.clean(obs_dict, False)
+
+    result = prop.clean(obs_dict, True)
+    assert isinstance(result[0]["0"], stix2.v21.File)
+    assert result[0]["0"]["foo"]
+    assert result[1]
+
+
+def test_stix_object_property_custom_prop():
+    prop = STIXObjectProperty(spec_version="2.1")
+
+    obj_dict = {
+        "type": "identity",
+        "spec_version": "2.1",
+        "name": "alice",
+        "identity_class": "supergirl",
+        "foo": "bar",
+    }
+
+    with pytest.raises(ExtraPropertiesError):
+        prop.clean(obj_dict, False)
+
+    result = prop.clean(obj_dict, True)
+    assert isinstance(result[0], stix2.v21.Identity)
+    assert result[0].has_custom
+    assert result[0]["foo"] == "bar"
+    assert result[1]
+
+
+def test_stix_object_property_custom_obj():
+    prop = STIXObjectProperty(spec_version="2.1")
+
+    obj_dict = {
+        "type": "something",
+        "abc": 123,
+        "xyz": ["a", 1],
+    }
+
+    with pytest.raises(ParseError):
+        prop.clean(obj_dict, False)
+
+    result = prop.clean(obj_dict, True)
+    assert result[0] == {"type": "something", "abc": 123, "xyz": ["a", 1]}
+    assert result[1]
diff --git a/stix2/v20/bundle.py b/stix2/v20/bundle.py
index 6a663d6..c5ca25d 100644
--- a/stix2/v20/bundle.py
+++ b/stix2/v20/bundle.py
@@ -35,9 +35,6 @@ class Bundle(_STIXBase20):
 
             kwargs['objects'] = obj_list + kwargs.get('objects', [])
 
-        self._allow_custom = kwargs.get('allow_custom', False)
-        self._properties['objects'].contained.allow_custom = kwargs.get('allow_custom', False)
-
         super(Bundle, self).__init__(**kwargs)
 
     def get_obj(self, obj_uuid):
diff --git a/stix2/v20/common.py b/stix2/v20/common.py
index 6695c9a..fe151fb 100644
--- a/stix2/v20/common.py
+++ b/stix2/v20/common.py
@@ -104,9 +104,9 @@ class MarkingProperty(Property):
     marking-definition objects.
     """
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         if type(value) in OBJ_MAP_MARKING.values():
-            return value
+            return value, False
         else:
             raise ValueError("must be a Statement, TLP Marking or a registered marking.")
 
diff --git a/stix2/v20/sdo.py b/stix2/v20/sdo.py
index e1f6410..538558a 100644
--- a/stix2/v20/sdo.py
+++ b/stix2/v20/sdo.py
@@ -219,12 +219,6 @@ class ObservedData(_DomainObject):
         ('granular_markings', ListProperty(GranularMarking)),
     ])
 
-    def __init__(self, *args, **kwargs):
-        self._allow_custom = kwargs.get('allow_custom', False)
-        self._properties['objects'].allow_custom = kwargs.get('allow_custom', False)
-
-        super(ObservedData, self).__init__(*args, **kwargs)
-
 
 class Report(_DomainObject):
     """For more detailed information on this object's properties, see
diff --git a/stix2/v21/bundle.py b/stix2/v21/bundle.py
index 5497da5..7ad056d 100644
--- a/stix2/v21/bundle.py
+++ b/stix2/v21/bundle.py
@@ -32,9 +32,6 @@ class Bundle(_STIXBase21):
 
             kwargs['objects'] = obj_list + kwargs.get('objects', [])
 
-        self._allow_custom = kwargs.get('allow_custom', False)
-        self._properties['objects'].contained.allow_custom = kwargs.get('allow_custom', False)
-
         super(Bundle, self).__init__(**kwargs)
 
     def get_obj(self, obj_uuid):
diff --git a/stix2/v21/common.py b/stix2/v21/common.py
index 2980276..af0a758 100644
--- a/stix2/v21/common.py
+++ b/stix2/v21/common.py
@@ -137,9 +137,9 @@ class MarkingProperty(Property):
     marking-definition objects.
     """
 
-    def clean(self, value):
+    def clean(self, value, allow_custom=False):
         if type(value) in OBJ_MAP_MARKING.values():
-            return value
+            return value, False
         else:
             raise ValueError("must be a Statement, TLP Marking or a registered marking.")
 
diff --git a/stix2/v21/sdo.py b/stix2/v21/sdo.py
index 35a878e..d0b6077 100644
--- a/stix2/v21/sdo.py
+++ b/stix2/v21/sdo.py
@@ -567,8 +567,6 @@ class ObservedData(_DomainObject):
     ])
 
     def __init__(self, *args, **kwargs):
-        self._allow_custom = kwargs.get('allow_custom', False)
-        self._properties['objects'].allow_custom = kwargs.get('allow_custom', False)
 
         if "objects" in kwargs:
             warnings.warn(
diff --git a/stix2/versioning.py b/stix2/versioning.py
index a6dc0bd..02a1e13 100644
--- a/stix2/versioning.py
+++ b/stix2/versioning.py
@@ -192,8 +192,9 @@ def new_version(data, allow_custom=None, **kwargs):
         or dict.
     :param allow_custom: Whether to allow custom properties on the new object.
         If True, allow them (regardless of whether the original had custom
-        properties); if False disallow them; if None, propagate the preference
-        from the original object.
+        properties); if False disallow them; if None, auto-detect from the
+        object: if it has custom properties, allow them in the new version,
+        otherwise don't allow them.
     :param kwargs: The properties to change.  Setting to None requests property
         removal.
     :return: The new object.
@@ -271,7 +272,7 @@ def new_version(data, allow_custom=None, **kwargs):
     # it for dicts.
     if isinstance(data, stix2.base._STIXBase):
         if allow_custom is None:
-            new_obj_inner["allow_custom"] = data._allow_custom
+            new_obj_inner["allow_custom"] = data.has_custom
         else:
             new_obj_inner["allow_custom"] = allow_custom