This is due to the fact that if one of the parties is neglectful of their property or does something harmful to the "Common area", the HOA rules will spell out how it is handled.
Especially if it is an FHA loan that the perspective buyer is obtaining, because FHA insures loans and they have to make sure the property will be taken care of to keep the value stable.
It sounds like you're in escrow on a fairly common type of townhome property in the South Bay basically known as a two on a lot. Many times in this situation the two owners have gotten together, decided that they'll each pay their own landscaping and insurance and think that they've dissolved the HOA...which is not the case. They've simply made it inactive but it can be reinstated as you can never completely dissolve it. This may not be the situation you're in, but this is fairly common in Torrance and Redondo in which the sellers or agents claim there is no HOA.....may not be an HOA fee, but always an HOA.