A proposed shake-up of strata laws could lead to significant urban renewal in the Illawarra.

The state government is reforming the strata laws for the first time since 1973.

The Strata Schemes Development Bill 2015 and Strata Schemes Management Bill 2015 are open to public consultation until August 12.

The key reform involves lowering the threshold for owner corporations to terminate their strata scheme; from 100 per cent agreement among owners to a 75 per cent majority decision.

This makes it easier for lot owners to end a strata scheme and carry out renovations or to sell the building.

The reforms will affect some two million industry professionals, strata owners, and residents in strata-titled townhouses and units.

Other changes include a new process to deal with building defects and improved accountability for strata managers.

Tracey Payne, director of Illawarra Strata Management, which is based in Wollongong and manages over 2000 lots, has welcomed the proposed changes.

"Where a scheme is ageing, has significant structural repairs or large compliance issues and the repair of those items is ultimately cost prohibitive then the lot owners should be able to resolve to terminate the scheme via a process that is more equitable than the current legislation," Ms Payne said.

"The reform proposes to make that process more reasonable in terms of the kind of resolution required and I agree with that."

Ms Payne said achieving a 100 per cent vote to terminate a scheme was extremely difficult and not a particularly fair process.

"I think changing it to 75 per cent is more reasonable and will allow the topic to be adequately argued from both sides."

"I would expect that the changes, if passed, will see a number of strata owners in the Illawarra start seriously looking at terminating, especially those buildings that are run down and in prime locations."

Peak industry body Strata Community Australia NSW said the reforms would set Wollongong up for a huge economic boost and record growth over the next 20 years.

But Greens NSW MP John Kaye said the new laws would result in many elderly and vulnerable apartment owners turfed out to fatten the profits of "greedy developers".

The government says the changes will include checks and balances such as compensating lot owners with the market value of their lot plus moving costs, referring renewal plans to the Land and Environment Court, a free advisory service for owners and a free advocacy program for vulnerable owners.

Ms Payne said that all lot owners have rights and could dispute a decision through the NSW Civil & Administrative Tribunal.

Submissions, information: policy@finance.nsw.gov.au,  fairtrading.nsw.gov.au