diff --git a/projects/igniteui-angular/core/src/services/overlay/overlay.spec.ts b/projects/igniteui-angular/core/src/services/overlay/overlay.spec.ts
index a408033166e..f5130815fd6 100644
--- a/projects/igniteui-angular/core/src/services/overlay/overlay.spec.ts
+++ b/projects/igniteui-angular/core/src/services/overlay/overlay.spec.ts
@@ -1240,6 +1240,44 @@ describe('igxOverlay', () => {
         //     expect(mockElement.style.height).toBe('100px');
         // });
 
+        it('#16988 - should not reposition overlay when detached', fakeAsync(() => {
+            const fixture = TestBed.createComponent(EmptyPageComponent);
+            fixture.debugElement.nativeElement.appendChild(outlet);
+            outlet.style.width = '800px';
+            outlet.style.height = '600px';
+            outlet.style.position = 'fixed';
+            outlet.style.top = '100px';
+            outlet.style.left = '200px';
+            outlet.style.overflow = 'hidden';
+            fixture.detectChanges();
+
+            const positionStrategy = new ContainerPositionStrategy();
+            const overlaySettings: OverlaySettings = {
+                outlet,
+                positionStrategy
+            };
+
+            const id = fixture.componentInstance.overlay.attach(SimpleDynamicComponent, overlaySettings);
+            fixture.componentInstance.overlay.show(id);
+            tick();
+
+            // Capture the content element while it is still in the DOM
+            const contentElement = fixture.nativeElement.parentElement.getElementsByClassName(CLASS_OVERLAY_CONTENT_MODAL)[0] as HTMLElement;
+
+            // Detaching the overlay calls dispose() on the position strategy which disconnects
+            // the IntersectionObserver and sets it to null. However, if a callback was already
+            // queued by the observer before disconnect, it will still fire and call updatePosition
+            // with the now-detached contentElement (parentElement === null).
+            fixture.componentInstance.overlay.detach(id);
+            tick();
+
+            // Simulate the stale IntersectionObserver callback firing after detach.
+            // Should not throw even though contentElement is no longer attached to the DOM.
+            expect(() => (positionStrategy as any).updatePosition(contentElement)).not.toThrow();
+
+            fixture.componentInstance.overlay.detachAll();
+        }));
+
         it('should close overlay on outside click when target is point, #8297', fakeAsync(() => {
             const fixture = TestBed.createComponent(EmptyPageComponent);
             const overlay = fixture.componentInstance.overlay;
diff --git a/projects/igniteui-angular/core/src/services/overlay/position/container-position-strategy.ts b/projects/igniteui-angular/core/src/services/overlay/position/container-position-strategy.ts
index b686471c351..da0c6f566a8 100644
--- a/projects/igniteui-angular/core/src/services/overlay/position/container-position-strategy.ts
+++ b/projects/igniteui-angular/core/src/services/overlay/position/container-position-strategy.ts
@@ -42,11 +42,15 @@ export class ContainerPositionStrategy extends GlobalPositionStrategy {
     }
 
     private updatePosition(contentElement: HTMLElement): void {
+        const outletElement = contentElement.parentElement?.parentElement;
+        if (!outletElement)
+            return;
+
         // TODO: consider using new anchor() CSS function when it becomes more widely supported: https://caniuse.com/mdn-css_properties_anchor
-        const parentRect = contentElement.parentElement.parentElement.getBoundingClientRect();
-        contentElement.parentElement.style.width = `${parentRect.width}px`;
-        contentElement.parentElement.style.height = `${parentRect.height}px`;
-        contentElement.parentElement.style.top = `${parentRect.top}px`;
-        contentElement.parentElement.style.left = `${parentRect.left}px`;
+        const outletRect = outletElement.getBoundingClientRect();
+        contentElement.parentElement.style.width = `${outletRect.width}px`;
+        contentElement.parentElement.style.height = `${outletRect.height}px`;
+        contentElement.parentElement.style.top = `${outletRect.top}px`;
+        contentElement.parentElement.style.left = `${outletRect.left}px`;
     }
 }