Hi Raul, welcome to Outdoorking.

Your governor arm needs to be installed on the governor arm shaft, but first you have to install the R clip on the shaft. Here are a couple of instruction drawings that show how it works and how to put it together. First, the governor arm shaft:
[Linked Image]

As you can see, the governor uses a centrifugal fly-weight system inside the crankcase. Hopefully you do not need to go in there and do anything, you just need to pull the shaft outward, rotate it clockwise as far as it will go (using a wrench across the flat on the end of the shaft), then put the R clip on, with its straight side laying in the groove in the shaft. Unfortunately from what you have said, the engine has been run with the governor arm and the R clip not fitted. While that was going on there was nothing to prevent the governor shaft from rotating, allowing the governor slider to fall off the governor shaft inside the crankcase. If that has happened, the crankcase will have to be dismantled to put it back on.

Next, you need to fit the governor arm:
[Linked Image]

As you can see, the lower end of the governor arm requires a pinch-bolt and nut, which appear to be missing from yours. I suggest you get these parts from a Honda dealer. Note Item 5 in the assembly instructions, which tells you how to get the governor arm into the correct rotational position before you clamp it.

You should now be able to gently pull the governor arm to the right and left, verifying that the throttle butterfly valve on the carburetor moves all the way from full throttle to idle. This verifies that the previous tenant, who seems to have been a bit heavy-handed, has not done any harm in that area.

When you have assembled those parts, it is time to fit a new governor spring as shown in the second diagram. I agree that the previous tenant seems to have mangled the old spring.

If any of this is unclear, please ask and I'll try to clarify further. Please come back in any case and let us know how it is performing.