I have option to purchase on my house, down payment was 12,000. Split 4 years. We did not pay the full down payment 2011 nor this years but landlord has been taking payments on that. Can a notice to quit include that balance of down payment and late fees he severed one stated July's rent and all the other fees

The notice of course can and may include any fees the landlord feels is justified, You can then argue that they are not due or payable when you appear in court.