diff --git a/lib/dao.js b/lib/dao.js
index 9289d64c..24bd6682 100644
--- a/lib/dao.js
+++ b/lib/dao.js
@@ -1109,8 +1109,14 @@ DataAccessObject.findOrCreate = function findOrCreate(query, data, options, cb)
         let obj;
 
         if (data) {
-          obj = new Model(data, {fields: query.fields, applySetters: false,
-            persisted: true});
+          const ctorOpts = {
+            fields: query.fields,
+            applySetters: false,
+            persisted: true,
+            // see https://github.com/strongloop/loopback-datasource-juggler/issues/1692
+            applyDefaultValues: false,
+          };
+          obj = new Model(data, ctorOpts);
         }
 
         if (created) {
@@ -1631,6 +1637,8 @@ DataAccessObject.find = function find(query, options, cb) {
             fields: query.fields,
             applySetters: false,
             persisted: true,
+            // see https://github.com/strongloop/loopback-datasource-juggler/issues/1692
+            applyDefaultValues: false,
           };
           let obj;
           try {
diff --git a/test/basic-querying.test.js b/test/basic-querying.test.js
index 2610689c..90fd7735 100644
--- a/test/basic-querying.test.js
+++ b/test/basic-querying.test.js
@@ -922,6 +922,30 @@ describe('basic-querying', function() {
           });
         });
     });
+
+    it('preserves empty values from the database', async () => {
+      // https://github.com/strongloop/loopback-datasource-juggler/issues/1692
+
+      // Initially, all Products were always active, no property was needed
+      const Product = db.define('Product', {name: String});
+
+      await db.automigrate('Product');
+      const created = await Product.create({name: 'Pen'});
+
+      // Later on, we decide to introduce `active` property
+      Product.defineProperty('active', {
+        type: Boolean,
+        default: false,
+      });
+
+      // And query existing data
+      const found = await Product.findOne();
+      found.toObject().should.eql({
+        id: created.id,
+        name: 'Pen',
+        active: undefined,
+      });
+    });
   });
 
   describe('count', function() {
diff --git a/test/defaults.test.js b/test/defaults.test.js
index c0503c71..f31dcb69 100644
--- a/test/defaults.test.js
+++ b/test/defaults.test.js
@@ -34,13 +34,13 @@ describe('defaults', function() {
     });
   });
 
-  it('should apply defaults on read', function(done) {
+  it('should NOT apply defaults on read', function(done) {
     db.defineProperty('Server', 'host', {
       type: String,
       default: 'localhost',
     });
     Server.all(function(err, servers) {
-      (new String('localhost')).should.equal(servers[0].host);
+      should(servers[0].host).be.undefined();
       done();
     });
   });
@@ -49,10 +49,9 @@ describe('defaults', function() {
     Server.create({host: 'localhost', port: 8080}, function(err, s) {
       should.not.exist(err);
       s.port.should.equal(8080);
-      Server.find({fields: ['host']}, function(err, servers) {
-        servers[0].host.should.equal('localhost');
-        servers[0].should.have.property('host');
-        servers[0].should.have.property('port', undefined);
+      Server.findById(s.id, {fields: ['host']}, function(err, server) {
+        server.should.have.property('host', 'localhost');
+        server.should.have.property('port', undefined);
         done();
       });
     });
diff --git a/test/manipulation.test.js b/test/manipulation.test.js
index 9c939c0d..679e5be8 100644
--- a/test/manipulation.test.js
+++ b/test/manipulation.test.js
@@ -981,6 +981,30 @@ describe('manipulation', function() {
         }
       );
     });
+
+    it('preserves empty values from the database', async () => {
+      // https://github.com/strongloop/loopback-datasource-juggler/issues/1692
+
+      // Initially, all Products were always active, no property was needed
+      const Product = db.define('Product', {name: String});
+
+      await db.automigrate('Product');
+      const created = await Product.create({name: 'Pen'});
+
+      // Later on, we decide to introduce `active` property
+      Product.defineProperty('active', {
+        type: Boolean,
+        default: false,
+      });
+
+      // And updateOrCreate an existing record
+      const found = await Product.updateOrCreate({id: created.id, name: 'updated'});
+      found.toObject().should.eql({
+        id: created.id,
+        name: 'updated',
+        active: undefined,
+      });
+    });
   });
 
   bdd.describeIf(connectorCapabilities.supportForceId !== false,
@@ -1619,6 +1643,30 @@ describe('manipulation', function() {
         })
         .catch(done);
     });
+
+    it('preserves empty values from the database', async () => {
+      // https://github.com/strongloop/loopback-datasource-juggler/issues/1692
+
+      // Initially, all Products were always active, no property was needed
+      const Product = db.define('Product', {name: String});
+
+      await db.automigrate('Product');
+      const created = await Product.create({name: 'Pen'});
+
+      // Later on, we decide to introduce `active` property
+      Product.defineProperty('active', {
+        type: Boolean,
+        default: false,
+      });
+
+      // And findOrCreate an existing record
+      const [found] = await Product.findOrCreate({id: created.id}, {name: 'updated'});
+      found.toObject().should.eql({
+        id: created.id,
+        name: 'Pen',
+        active: undefined,
+      });
+    });
   });
 
   describe('destroy', function() {
@@ -2563,6 +2611,30 @@ describe('manipulation', function() {
         });
       });
     });
+
+    it('preserves empty values from the database', async () => {
+      // https://github.com/strongloop/loopback-datasource-juggler/issues/1692
+
+      // Initially, all Products were always active, no property was needed
+      const Product = db.define('Product', {name: String});
+
+      await db.automigrate('Product');
+      const created = await Product.create({name: 'Pen'});
+
+      // Later on, we decide to introduce `active` property
+      Product.defineProperty('active', {
+        type: Boolean,
+        default: false,
+      });
+
+      // And upsertWithWhere an existing record
+      const found = await Product.upsertWithWhere({id: created.id}, {name: 'updated'});
+      found.toObject().should.eql({
+        id: created.id,
+        name: 'updated',
+        active: undefined,
+      });
+    });
   });
 });