My dad has recently started saying that the neighbor is bugging his house. He says he hears him in the crawlspace. We're not sure what to do.

Oh dear. In my mom’s nursing home, which was in Russia (not really) they had installed security cameras all over her room, especially in the sprinkler system in the ceiling. I told her that couldn’t be because there was water in there and it would short circuit the camera. She accepted that. There was also a young boy on a bicycle in the “street” (hallway) outside her “apartment” (room) who stole her dirty underwear. On and on. Unfortunately, when our LO passes, this is what we remember about them. It can be funny and make us unbearably sad at the same time.

Oh and the mice in our last house wore very heavy boots.
Which reminds me of when we were first married and rented an apartment in London. There was an irish man three doors down (they were row houses) who liked to tell tails of the "Troubles" in Ireland back in the 30s. He said they knocked holes in the attics between the houses so the bad people could escape when the police came knocking.

Sorry Tommy I really have no more helpful suggestns than others have already given.

Don't worry it could be worse. My hubby thinks he is under servielence and maybe he is right. he thinks people are getting into his computer so he keeps it in a tin box to prevent access.
I believed it at one time because when we first came to the US we always got the majority of our mail on Tuesdays. We used to joke that the FBI collected it all week, looked it over then forwarded it on Monday morning.
A couple of weeks ago he was selected for a "random" search at the airport. He thinks he must be on some list because he is always picked out. This time his belt buckle set off the alarm and when he removed it the alarm stopped! The TSA still took him aside to a private room. Don't know what they will do with me next time if ever I fly with two metal hips plus a knee.

PS We don't get all our mail on a Tuesday now. maybe they have got tired of reading all those charitable requests.

Tommy, what your Dad is going through could be just an Urinary Tract Infection which can cause elders to imagine things. My Dad thought this home had ants on the walls and in his food. Sure enough it was a UTI and once the antibiotics started to kick in, the ants started to go away.

Jeanne, good points in your first and second paragraphs - you raise an issue that I think isn't often considered.

Dementia is not the only cause for imagining things. I know of someone who was paranoid, imagined she was being persecuted by the family, had been on a pity party for years, refused to take care of herself physically and ended up with multiple life threatening complications.

For decades others were "mean to me". Refused to get psychiatric help, imagined family bugged the house and eavesdropped.

Mental illness apart from dementia could be a cause for paranoia.

Tommy, I'm also wondering if this is the first episode, or a pattern, and if anything specific preceeded it, especially something like watching political news or the horrific weather disasters. I found they make me unsettled and anxious, so I have to control exposure to catastrophic disasters, especially when newscasters obsess on them over and over again.

I used to think there were people moving around in our walls. My mother assured me they were not. I think it would have been more comforting if she has explained it was mice moving around. (I was 4.)

I wonder how much of elder delusions are triggered by some actual outside happening. Dad hears noises under the floor. His brain is confused. He can't figure out what is making those noises. But not knowing doesn't feel right. So he makes something up. Maybe he recently had a memorable encounter with the neighbor so he drags that in. This is all speculation. Delusions caused by a broken brain are not the same as fantasies a child makes up. But they are both trying to make sense of something in the world that they don't understand.

Why on earth wouldn't your dad understand house noises? Well, dementia is one (but not the only) possibility. Dementia often involved paranoia and delusions. Have you noticed any other changes in Dad's behavior? Is he forgetful? Often confused about the day or the week or the time of day? Is there any evidence he is not keeping up with his bills?

It would be good if you could get him to a doctor, even under false pretenses. "Let's get your ears checked out and see if they are causing those noises when the house is quiet."

Does Dad live alone? Does he use the stove? That is always a worry when people get confused. Look for any evidence of accidents. Do some reading on early dementia symptoms. (And remember, this may NOT be dementia. But I think it is worth considering.)

Until you can get him to his doctor, watch closely for other behavior changes. Make a log of them so you can be specific in what you tell the doctor.

Has anyone tried listening to see if they can hear anything in the crawl space? Doesn't have to be the neighbour - could be another invader, perhaps, like a furry creature? But if it's always the same noise and always in the same place, I wouldn't leap to any conclusions about paranoia.

Classic dementia in my book. My father developed into a state where he "hated" all his neighbors. He even was sort of "Stalking" one of them. You need to watch over him, document his behaviors and try to discuss with his doctor.

Could he have a urinary tract infection? Find an excuse to take him to the doctor. Call the doctor ahead of time and pass a written note to his support staff. It is worth a try...good luck.