Pentland revealed it has decided to transfer to Cairn following a strategic review and will invite tenants to a series of consultation events to develop the detail of the proposed transfer in due course.

In a routine move for such an operation, the Regulator has said it will engage with both organisations to oversee the transfer to “seek assurance that tenants’ interests are protected”.

In an updated engagement plan for Pentland, the Association has been told to keep the Regulator informed as it develops its proposals for a transfer of engagements to Cairn and the outcomes of its consultation with tenants. It must also send the Regulator the final business case in support of its proposals.

The Regulator will also engage with Cairn regarding the transfer process as well as the landlord’s development plans and its subsidiary ANCHO.

A partnership between ANCHO and Cairn went live in November after it received final consent from the Scottish Housing Regulator and the Financial Conduct Authority.

In an updated engagement plan for Cairn, the Regulator said it will monitor the delivery of commitments made to ANCHO tenants as part of the constitutional partnership process.

Meanwhile, the Regulator added that Cairn has plans to continue to grow through a considerable programme of new homes for social and mid-market and market rent. As a result, the number of affordable homes provided by Cairn will increase by 17% over the next five years.

The Regulator has instructed Cairn to provide an update on its development programme by October 31 to include “details of the scale and tenure mix, timescales for delivery and any material delays or changes to the programme”.

Cairn Housing Group told Scottish Housing News it will continue to update the Regulator as the potential transfer project develops.

Chief executive Jason MacGilp said: “It’s standard practice for the Regulator to increase its level of engagement whenever partnerships between organisations are on the horizon, and is expected.

“We will be continuing to update the Regulator as the potential transfer project develops. Our initial focus will be analysis of stock condition as part of our due diligence.

“We’re delighted that Pentland Housing Association has chosen Cairn as its preferred partner and believe that by working together we can create a stronger organisation to better serve the needs of customers in the Caithness and Sutherland.”