Arklet decided to pursue a transfer of engagements to Hanover last year and a vote on the proposal saw 98% of Arklet tenants approve the merger.

The Association is now taking forward the next steps in the transfer.

In a routine move for such an operation, the Regulator has said it will engage with both organisations to oversee the transfer.

The Regulator used its statutory powers to appoint a manager and three governing body members to Arklet in February 2017 amid “serious weaknesses” in its governance and financial management. It subsequently reduced the number of appointments to the governing body to two.

In an updated engagement plan for Hanover, the Regulator said: “Arklet still requires the expert support of the statutory manager and the appointees to help it implement the transfer of engagement proposals and support its governance.

“We continued the appointment of the manager and the appointment of two governing body members until 8 November 2019.”

The Regulator said Arklet must provide an update on progress with its proposed transfer of engagements to Hanover and send quarterly management accounts within one month of the end of the quarter.

The Regulator considers Hanover as a systemically important landlord given its turnover and is also seeking some additional assurances about its development plans.

One of the larger developers of new affordable housing in Scotland, Hanover plans to continue to grow through a considerable programme of new homes for social rent. As a result, the number of affordable homes provided by Hanover will increase by almost 10% over the next five years.

In an updated engagement plan for Hanover, the Regulator has called on the Association to keep it informed about progress with the proposed transfer of engagements from Arklet and send an update on its development programme by 31 October 2019.

A spokesperson for Hanover told Scottish Housing News: “We are progressing well with the partnership arrangements and we are on course for a transfer of engagement on 1 November.”